““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Sir Richard Branson
"I predict that you will either go to prison or become a millionaire." Those were the parting words to Richard Branson from the headmaster at England's Stowe School, when Branson left the institution at age 16.
The forecast was just a bit off on both counts. Branson has tangled with the law a few times over the years and did go to jail very early in his career, but only for one night. (He paid a fine for selling record albums that had been declared export stock and has never again been behind bars.) And while he indeed became a millionaire, calling him that today would be a serious understatement: his net worth currently hovers somewhere between $3.8 billion and $7.8 billion, depending on who's doing the counting.
But the headmaster's prediction was understandable. A flamboyant maverick since childhood, Branson launched his first successful business-a national magazine for students-while still in high school. And from an early age, he has demonstrated a love for risk-taking and adventure. Some of his undertakings-such as attempting to fly around the world in hot-air balloons-have nearly killed him, though he did successfully cross the Atlantic and Pacific in balloons. Some business ventures, like Virgin Cola and the perhaps poorly named Virgin Bride clothing retailer, have flopped or floundered. But still others, such as Virgin Records and Virgin Atlantic Airways, have made him one of the richest people on Earth.
His success and style, meanwhile, have rendered him so popular that when pollsters recently asked Britons who their children should look up to, Branson scored second only to "a family member." Below him on the list were Jesus Christ, Nelson Mandela, Winston Churchill and Martin Luther King.
Today, at age 57, Branson sits atop an empire consisting of well over 300 Virgin Group companies-but "sits" may be the wrong word to apply to a man who seems to have been running without pause for decades. As our recent conversation suggests, Branson remains as fired up as when he started his first company and has lots of projects in the works-including Virgin Charter, an online booking service for private aircraft that went live to the public the day we met in his New York offices.
You've said you never get the accountants in before you start a business and that "it's done on gut feeling." Can you describe that feeling?
Yes, let's take the example of going into the airline business. I had record companies all over the world. I traveled on other people's airlines. A lump of chicken would be dumped in my lap, there was no entertainment system, the staff on the planes never smiled and it was just a miserable experience. My gut feeling was if I could create the kind of airline that I'd like to fly on, other people would like to fly on it, too. If I had gotten the accountants in, they would have almost definitely told me all the reasons why it wasn't going to work. But my gut feeling was that if I could create the best airline in the world, there would be a market for it.
We've set up 300 companies and almost all of them have been based on personal experience. I've been frustrated by the way something has been done by other people and if I can do it better, hopefully the bills will be able to be paid.
I've read that you actually have well over 300 companies now. Do you even know how many?
I don't know exactly.
With so many companies, how do you keep a handle on things and make sure your business philosophy is being followed?
First of all, we find fantastic people to run the companies and we give them a stake in the businesses, so they can run them as if they were their own. I'm the front person for Virgin but behind me are some brilliant people who make sure it all works-people who look for the best in people, people who are good motivators and who are good at praising people. And that hopefully will ricochet down through the companies.
Air transportation's been a big theme throughout your career-everything from space travel to hot-air balloons to Virgin Atlantic and now Virgin Charter. Why have you been so attracted to the field?
I suppose my most common dream is being able to flap my hands and fly. A lot of us have that dream-it's something all of us would love to be able to do. Being able to try to fly around the world in a balloon and watching the magnificent world that we live in from great heights has been breathtaking. Flying over the Himalayas, Everest, the Atlas Mountains and so on-it's incredible to be able to experience this, to go with the wind. I watched the [first] moon landing and thought, "One day, I'll be able to go to the moon myself." But NASA didn't really have plans for you and me; they had it planned just for their astronauts. So now it's great to be able to soon offer people trips into space [via Branson's Virgin Galactic].
What was your first experience with charter aircraft?
About 25 years ago, I was trying to get from Puerto Rico to the British Virgin Islands and I was with 50 other passengers who were meant to be on an American Airlines plane. And as airlines sometimes do, they decided to cancel the flight and we were all left stranded at the airport. So I said to everyone, "Hold on, let me see what I can do." So I chartered a plane for the 50 passengers, divided the other 49 passengers into the price, sold out the plane. That was my first charter experience. And actually, as a result of that, I started Virgin Atlantic. I thought, "Let's start an airline that doesn't bump passengers and doesn't create absolute misery for passengers." I didn't expect that 25 years later I'd be running a charter company with Scott [Duffy, CEO of Virgin Charter].
Why did you decide to partner with him?
I loved [Scott's] idea because I have enormous frustration when I need to book a private plane. I have no idea whether the price is fair. I don't know about the quality. It's just very, very frustrating. And I notice if I do rent a plane, it comes empty and goes back empty. All those empty legs going through the sky-I felt it made sense to fill those empty legs.
I read that someone in your company called Scott and said, "We want to give you much more money than you ever imagined you'd need." Can you tell me how much you put into Virgin Charter?
I suspect our first call would have been to woo him and say we'll give him much more than he needs and from then on we would have been backtracking. I don't know how much money we put in, but we put in enough so that Scott and the team could create a Web site that anyone who wants to rent a private plane will find it easy to use.
Are you actively involved in the business or are you mainly just funding it and giving it your brand name?
I'm there at the birth and then, generally speaking, I'll leave it to Scott and other people to run the company. And then anytime they want me to dive in, I'll be very happy to dive in. You know, at the moment, this is an American company and we're talking about trying to take it overseas and make it global. And I'm sure this company can be the base of other companies as well. The kinds of people who fly on private planes might want to go to the moon one day.
Name: Sir Richard Branson
Occupation: Chairman of Virgin Group of more than 300 companies, including Virgin Atlantic Airways and the new Virgin Charter.
Transportation: Uses Virgin Charter, Virgin Atlantic and Virgin America.
Personal: Lives primarily on Necker, his own island in the Caribbean, and also in London. Married to second wife Joan since 1989. Two grown children.